An initiative has been launched that would make a company liable for any tax costs associated with backdated and misplaced stock options that rank-and-file employees might not have been aware of.
Internal Revenue Service Commissioner Mark W. Everson said that the practice of the backdating, which primarily benefited corporate executives and insiders, is widespread and that the initiative would exclude executives and insiders.
In 2006, employees were responsible for paying an additional 20 percent tax and any interest tax they owed for incorrectly reporting option prices. If priced correctly, the employee would have only had to pay income tax on the difference between the value at the date of grant and exercise. The initiative would place the burden of paying the penalty on the company.
Employers must notify the IRS of their intent to participate by Feb. 28.
Employees who fail to take corrective action will be responsible for the 20 percent tax and interest if their employer doesn’t participate in the program or abide by its rules.
The taxes the companies pay will be treated as additional compensation income.
The number of working heads of families participating in retirement plans dropped more than 2.5 percent from 2001 to 2004, according to a recent study.
The Employee Benefit Research Institute, which reported the survey, said that 46.1 percent of workers participated in a retirement plan in 2004, compared to 48.7 percent in 2001.
The survey focused on companies with 10 or more employees. Sixty-one percent of heads of family work for an employer who has a retirement plan.
The Securities and Exchange Commission is taking steps to make it harder for shareholders to file lawsuits against publicly traded companies and their executives.
The change would protect businesses from fraudulent lawsuits filed by “professional plaintiffs,” said Christopher Cox, chairman of the commission.
A brief was filed at the Supreme Court asking for a legal standard that would make it more difficult for investors to win lawsuits.
Federal Reserve Governor Sue Bies submitted her resignation to President Bush, saying that she wants to spend more time with her family.
She has been on the board since 2001, and served as chairwoman of the Committee on Supervisory and Regulatory Affairs and the Committee on Consumer and Community Affairs, and as a member of the Committee on Federal Reserve Bank Affairs.
Her resignation will be effective March 30.
Start-up businesses will take the stage at the Venture Capital of the Rockies conference Feb. 20-22 at the Ritz Carlton at the Beaver Creek ski resort.
Companies that have presented during past conferences have raised more than $3 billion during the last five years.
The Rocky Mountain region has the highest concentration of technology workers in the nation. Twenty presenting companies will attend, representing a variety of industries.
The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) has increased the maximum amount of foreign earned income which may be excluded from gross income to $82,400 for American citizens living or working abroad.
TIPRA also limits the amount of housing costs that may be deducted or excluded under section 911, according to the IRS Newswire.
A bill is being reintroduced in Congress that will allow American manufacturers to combat Asian currency manipulation.
The Hunter-Ryan China Currency bill (now titled the HR 782, the Fair Currency Act of 2007), was first introduced in 2005. The bill is WTO compliant and will “… lead to sanctions on currency manipulators, put a stop to foreign government manipulation of currency markets and lead to appropriate exchange rates,” said Kevin L. Kearns, president of the U.S. Business and Industry Council.
China, Taiwan and Korea were all found to be in violation of the 1988 Trade Act’s currency provisions. The U.S. trade deficit in goods with China has been climbing each year and is currently $233 billion.
Blue Cross and Blue Shield Insurance has entered the banking business.
The company has received a federal savings bank charter for Blue Healthcare Bank, which is owned by 33 Blue Cross and Blue Shield companies. The service, which should be available by the end of the year for members, will allow customers to use debit cards to deduct money from their HSA accounts for qualified expenses.
Nearly one in three Americans are served by Blue Cross and Blue Shield.
Lorna Gutierrez covers banking and finance for the Colorado Springs Business Journal.